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Tuesday, 22 May 2012

Italian banks UniCredit and Intesa Sanpaolo said they were selling their combined 11.5 percent stake in the London Stock Exchange (LSE), as they both move to shed non-core assets and boost their capital.

In separate statements on Tuesday, UniCredit and Intesa said they would place their respective stakes with institutional investors. UniCredit has 6.1 percent and Intesa 5.4 percent of the LSE, which bought the Milan bourse in 2007, making them the LSE's third and fourth biggest shareholders.

"It was a non-strategic asset for both banks," said one source close to the situation. "The move is consistent with the strategy of refocusing on core business and also nets a capital gain," the source, who declined to be named, said.

The Initial Public Offering (IPO) for Bank Nizwa, Oman’s first Islamic bank closed yesterday after receiving an overwhelming response from investors. The bank floated 600,000,000 ordinary shares at an offer price of 102 baisas per share, through an initial public offering commenced from April 23, 2012.
On the occasion Dr Jamil El Jaroudi, Chief Executive Officer, Bank Nizwa said, “We are really thankful to the investment community in Oman, GCC and other parts of the globe, for their tremendous response and the confidence they have placed in us. This is a proud day for Bank Nizwa and we are committed to uphold the trust placed in us by our valued shareholders.”

This is a roundup of news articles and other materials circulating on the Arabian Peninsula and reflects a wide variety of opinions. It does not reflect the views of the Arabian Peninsula Page Editors or of Jadaliyya. You may send your own recommendations for inclusion in each week's roundup to ap@jadaliyya.com by Monday night of every week.

'Twenty-eight years old, with spiky gelled hair, orange tan and a donkey jacket'. As reported by The Wall Street Journal's James Herron, this is Spencer Freeman, taken to court last Thursday over rumours he circulated about the oil company Gulf Keystone.

Mr Freeman earned the wrath of the oil company for pretending in his Twitter account to have access to inside information from Gulf Keystone and directors at ExxonMobil, whom he alleged were planning to purchase the company. He had a devoted following, and when he claimed recently that the company was planning to issue new shares at a discount, the share price dropped by 9 per cent.

He admitted that his tweets were "fictional facts … not related to the real world of reality" and promised to desist. But this episode is an ironic comment on the volatile world of small oil companies.

Abu Dhabi shares rose to a one-week high, led by Aldar Properties PJSC (ALDAR) and Sorouh Real Estate Co. (SOROUH), as the emirate’s biggest developers were said to be considering appointing advisers for a possible merger. Saudi shares rallied.
Aldar and Sorouh rose to the highest levels in two weeks. The stocks pushed the ADX Real Estate Index (ADRE) up 3.5 percent. The ADX General Index (ADSMI) gained 0.1 percent to 2,471.05, the highest since May 15, at the 2 p.m. close in Abu Dhabi. Saudi Arabia (SABIC)’s Tadawul All Share Index advanced 1.1 percent, the most in a month. Emerging-market stocks rose the most in eight weeks.
“Investors have interpreted the appointment of advisers as positive as it shows the merger talks are progressing well,” said Waleed Al Khateeb, the senior finance manager at Daman Securities in Dubai. “A merger would be extremely positive for the real estate sector in Abu Dhabi.”

Simeon Kerr explores a Gulf state that is trying to become more than just a tax-free destination. Expats comprise 90 per cent of the population of the emirate, whose good connections and more liberal attitudes make it the easiest place to live in the region.

Dubai Islamic Bank priced a five-year, $500 million Islamic bond, or sukuk, on Tuesday, the first time the bank has tapped debt capital markets since 2007.
The deal priced at par with a profit rate of 4.752 percent at a spread of 365 basis points over midswaps, arranging banks said.
The spread was 10 basis points tighter than initial price guidance released the previous day, indicating good demand for the issue.

Up to a dozen retail-focussed family groups in the Gulf Arab region are ready to go public once global market conditions improve, HSBC said, a move that would give investors access to the fast-growing consumer goods
sector.
The flow of initial public offerings from the Middle East,both on local and international exchanges, has been moribund in recent years as volatile markets put off potential issuers.
"We've got between half-a-dozen to a dozen family groups with retail operations in the (Gulf Cooperation Council) who are waiting to list in locations around the world when market conditions improve," Nicholas Levitt, head of commercial banking in the United Arab Emirates at HSBC told reporters.

Emirates NBD, Dubai's largest lender, named Mohammad Kamran Wajid as chief executive of its investment banking arm Emirates NBD Capital, the bank said in a statement on Tuesday.

Wajid, a 14-year veteran of the bank, was previously general manager of the unit, a role which he took up in November after ENBD consolidated its investment banking and financial advisory businesses under its Emirates NBD Capital arm.

Dubai Islamic Bank launched a five-year, $500 million Islamic bond, or sukuk, at a spread of 365 basis points over midswaps, arranging banks said on Tuesday.
The launch spread was 10 basis points tighter than initial price guidance released the previous day, indicating good demand for the issue.
Pricing is expected later on Tuesday. Deutsche Bank, Emirates NBD, National Bank of Abu Dhabi, HSBC and DIB itself are bookrunners on the deal.

Dubai's index rises for a third session in four but late selling wipes out much of its intraday gains, with short-term retail traders dominant and seeking a quick profit.
The benchmark climbs 0.6 percent to 1,497 points, easing away from Wednesday's 15-week low and taking its 2012 gains to 10.6 percent.
"What we're seeing now is daily trading from small speculators - they are watching what's happening in global and regional markets and trading based on that," says Samer al-Jaouni, General Manager of Middle East Financial Brokerage Co.

Saudi Arabia will see more Islamic bond, or sukuk, and conventional debt issuance this year, the oil-rich kingdom's finance minister said on Tuesday.
"I see more sukuks and bonds being issued in future including from government agencies that have the ability to
generate income and operate commercially," Ibrahim Alassaf said, speaking at a conference in the capital of Riyadh.
Asked if that meant this year he said: "Why not."

Oil storage capacity in the UAE's port of Fujairah is expected to rise to around 7.8 million cubic meters by 2014 from its current capacity of 5.8 million cubic meters, the harbour master at the Fujairah port said on Tuesday.
Fujairah is poised to rival the world's top two bunkering hubs, Singapore and Rotterdam, thanks to booming demand from the Middle East as well as Asia.
"We're working to develop our infrastructure parallel to the oil storage growth," Tamer Masoud told Reuters on the sidelines of an industry event in Dubai.

State-controlled Abu Dhabi National Energy Co. (TAQA) and the Turkish energy ministry have formed a joint committee to discuss investment opportunities for the oil and gas utility in Turkey, the firm said on Tuesday.

The committee will "discuss the investment opportunities available in the energy sector in Turkey," TAQA said in a statement.

The announcement came after a delegation from TAQA, headed by the firm's chairman Hamad al-Hurr al-Suwaidi, went to Turkey to meet with officials from the energy ministry, including Turkish Energy Minister Taner Yildiz, TAQA said.

2012 has so far not lived up to expectations of being the decisive one for the private equity industry. Many funds are still waiting for the right time to exit their investments at the best possible price in order to generate returns for their Limited Partners.
On the other hand, investors are not giving up. Several fund managers have launched funds during the first quarter of the year and into the early days of the second quarter.

Q1 2012 witnessed a decline in the number of exits compared to the same period last year; marking one exit in comparison to four. However, funds made 19 new investments during the first three months of the year, a 50% increase in the number of deals compared to Q1 2011.

A showdown is brewing in Sharjah, the UAE’s third largest emirate. Sharjah-based Dana Gas, a natural gas-focused E&P company, has a $920m sukuk due in five months, yet the issuer is far short of the required funds to repay the obligation. The sukuk’s price has fallen from above 95 in July 2011 to just 68, as restructuring headlines continue to spook investors.

This situation has gained increasing global attention given the involvement of prominent international advisers and foreign investors and there is a high probability that Dana will become the first public bond restructuring in the UAE’s history.

The chairman of Leighton Holdings, Australia's biggest builder, believes the company should never have gone into a joint venture with Al Habtoor Group in Dubai, having faced severe challenges in the region.

The Habtoor Leighton Group venture was established in 2007, before the global financial crisis took its toll on the UAE's property sector.

"With hindsight, no, we're not happy with [the joint venture]," Stephen Johns, the chairman of Leighton Holdings told The Australian Financial Review. "We should never have gone into it."

The IMF is to advise the UAE on public spending to ensure future generations enjoy the full benefits of the country's wealth.

Officials from the IMF will help to better link up the budgets of the seven emirates and the federation, said Harald Finger, the IMF mission chief to the UAE.

"An IMF technical assistance mission is scheduled to support the UAE’s Fiscal Coordination Council (FCC) in broadening the scope of its work toward an effective coordination of fiscal policy plans," he said yesterday after the IMF released a report following a recent mission to the country.

The stock market regulator has barred company directors from leaking inside information and obliged them to disclose the shareholdings of their spouses and children in a new rule introduced yesterday.

The Securities and Commodities Authority (SCA) has come under growing pressure to tighten rules on disclosure and transparency in a bid to win the confidence of foreign investors and gain emerging market status.

A company director must "respect the confidentiality of all information and data gained access to or that came to his knowledge as a result of his membership to the board, so long as the information is a classified one," the regulation published on the SCA website said.

Jordan’s effort to cut subsidies and tap into reserves may not be enough to bridge the Arab nation’s widening budget deficit as $3.7 billion of debt matures this year and the energy bill spirals.
The country is drawing on foreign reserves and cutting subsidies to access cash after its oil and electricity import bill surged 54 percent to 3.7 billion dinars ($5.2 billion) in 2011, according to statistics department data. Foreign-currency reserves slumped 11 percent in the first quarter from December to $9.36 billion, central bank data show.
Covering the state’s expenses may get harder without issuing new debt after the government this week doubled its 2012 budget deficit forecast to 9.3 percent of economic output, the highest in at least a decade. That exceeds the International Monetary Fund’s deficit forecasts for Lebanon, Morocco and Tunisia. Jordan’s new government, sworn in this month, approved measures to cut spending by 300 million dinars, the official Petra news agency reported May 19.

Bharat Oman Refineries Ltd. (BORL), a joint venture between Bharat Petroleum Corp. and Oman Oil Co., hired Deutsche Bank AG to arrange a $140 million, eight-year loan, according to a person familiar with the matter.
The loan pays a margin of 345 basis points over the London interbank offered rate and a fee of 1.5 percent for commitments of $25 million or more, the person said, asking not to be identified because the details are private. The facility, which has been in syndication for about three weeks, has attracted about $175 million in pledges so far from six banks, the person said. The loan is guaranteed by Bharat Petroleum.
Bharat Petroleum finance director S. Varadarajan didn’t answer two calls to his mobile phone seeking comment on the financing.